The best ways to get your business out of debt

The best ways to get your business out of debt

 

The best ways to get your business out of debt

Over the years, news sources have described UK businesses as being ‘addicted to debt’. This, of course, isn’t true. Cash is still king! However, the business world relies on credit agreements and payment terms. Unfortunately, without proper credit control or debt management, these can lead to cash flow problems. If you don’t have the money to pay staff or buy resources deliver your service or product you can’t grow your business. You’re stuck. Improving cash flow and getting debts paid should be your priority if you want to move forward and be successful.

Get effective credit control

An excellent approach to eliminating debt is minimising the risk of invoices becoming overdue in the first place. 4 out of 10 businesses in the UK have cash flow problems due to late invoices, but it’s likely most companies will experience a late-paying client at some point. If you have credit control, but still receive late payments, it’s a sign that there are steps you can take to tighten up your existing processes. Perhaps the credit limits are set too high, or you have the wrong contact. Either way, improving your credit control is essential to keeping your cash flow steady and strong. If you find late payments are still an issue despite your credit control efforts, perhaps it’s time to partner with a respectful and reliable credit control agency.

Outsource debt collection

If your credit becomes bad debt, our number one piece of advice for getting your head above water would be to outsource your debt collection practices to professionals.

What appears to be counterproductive at first, could save your business. Professional debt collectors charge you for their services, and if you’re in debt, paying other people to do work you believe you can do internally doesn’t sound like the best approach. That’s until you realise the real cost of internal debt collection.

Late paying customers

Late paying customers are a problem for most businesses. However, smaller and medium-sized enterprises are more affected by this. In some cases, it leads to complete closure of a company. You need to get your money from these customers as soon as possible. But, are your staff the best people to do this? They have been trained in their industry, not in debt collection. It requires a significant amount of legal knowledge, people skills, and industry-specific training that staff outside of this industry would lack. Without it, getting what you’re owed will take longer, and keep you in debt.

Furthermore, if your staff are busy chasing up late invoices, who is working on your business? If your team could focus their time on their jobs, your company would be more productive and more profitable. Instead, they’re currently trying to chase overdue invoices. The losses that you receive from a lack of productivity, paying staff to work on matters that won’t improve your business, and less effective debt collection will add up. You’ll find that outsourcing to a professional agency will be faster, cheaper, and will help you maintain good relationships with your customers.

Why not give Daniels Silverman a try? Our debt collection and credit control services are outstanding, and we have the experience to prove it. Find out more by visiting our website https://www.Danielssilverman.co.uk and starting a web chat, or give one of our business development team a call on 0800 0730221